Implied by the two outstanding debt issues

Assignment Help Financial Management

Reference no: EM132033050

Filer Manufacturing has 6 million shares of common stock outstanding. The current share price is $78, and the book value per share is $5. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $65 million, has a 7 percent coupon, and sells for 98 percent of par. The second issue has a face value of $35 million, has a 8 percent coupon, and sells for 106 percent of par. The first issue matures in 22 years, the second in 5 years. The most recent dividend was $5 and the dividend growth rate is 8 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 30 percent. Required: What is the company's WACC? (Do not round your intermediate calculations.) 14% 7.18% 6.57% 13.75% 6.88%

Reference no: EM132033050

Questions Cloud

What would the minimum score be : What would the minimum score be? The mean on the bell curve is 26 and the standard deviation is 9.

How would a roman stoic respond to the truths : How would Augustine of Hippo respond to Buddhism's Four Noble Truths? How would a Roman stoic respond to the Truths?

How would you interpret this estimate : Investigators report an beta estimate of 0.34 for sodium intake (g/d) associated with hypertension status among a population US nurses aged 40-80 years

How do hebrew laws differ from those in hammurabis code : How do Hebrew laws differ from those in Hammurabi's Code? How do you think the laws of these respective civilizations dictated these differences?

Implied by the two outstanding debt issues : Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues.

Attendance rate per meeting-find the mean : A club has 225 members. If there is a 60% attendance rate per meeting, find the mean, variance, and standard deviation of the number

Cost-volume-profit analysis assumptions : Cost-Volume-Profit Analysis assumptions include which of the following:

What height is represented in the first quartile : If you are looking at woman ages 20-29 the mean height is 65.2 w a standard deviation of 2.92.

What is the company pretax cost of debt : Waller, Inc., is trying to determine its cost of debt. What is the company's pretax cost of debt?

User Account

All Pages